Schaeffer's Midday Options Update Features Symantec, Hewlett-Packard, IBM, Ford Motor, and Johnson & Johnson.

CINCINNATI -- Today's Schaeffer's Midday Options Update features Symantec (NASDAQ:SYMC), Hewlett-Packard (NYSE:HPQ), IBM (NYSE:IBM), Ford Motor (NYSE:F), and Johnson & Johnson (NYSE:JNJ). The Midday Options Update contains a brief commentary on the day's most notable activity and a table listing the most-active calls and puts for the day.

The Midday Options Update is published every day at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. For additional information about this report or to have it delivered to you free via email every day click on the following link. http://www.schaeffersresearch.com/redirect.aspx?CODE=PRMOU1M&PAGE=1 .

Options Update: Calls Active on Symantec

Stocks are modestly higher on some strong earnings reports and benign economic data. Kicking things off with just a dash of economic news, the Commerce Department reported that June new home starts were unchanged at a seasonally adjusted rate of 2.004 million. Analysts had predicted an increase to 2.07 million. May's starts were revised lower to 2.004 million from 2.009 million. In June, starts of single-family homes tumbled 2.5 percent to a 1.667 million annualized rate, while multi-family dwelling starts jumped 14.2 percent. June building permits for new housing jumped by 2.4 percent to a 2.111 million rate from May's 2.062 million.

Paper Gains

International Paper (IP) has given the paper sector a healthy boost this afternoon. The company announced this morning that it would restructure to focus on just two businesses, uncoated papers and industrial and consumer packaging. The firm will also sell or spin off its stakes in various units to return $8 billion to $10 billion to the company. The firm would sell a 50.5-percent stake in a New Zealand forest-products subsidiary, convert some paper mills, and close some packaging plants in realignment expected to be complete by 2007. At last check, IP was up by more than 10 percent.

Hurd Thins the Pack

Hewlett-Packard's (NYSE:HPQ) Chief Executive, Mark Hurd, announced that the computer behemoth could reach its "full potential" if it can cut 14,500 jobs. The company is looking to simplify its business by moving sales and marketing efforts directly within its business units. The job cuts will take place during the next six quarters, and HPQ believes it will save roughly $1.9 billion annually. The computer company expects roughly half of the savings to be used to offset market forces or be reinvested in its business, the remainder is expected to flow through to operating profit.

Earnings Extravaganza

Last night, IBM (NYSE:IBM) reported a second-quarter profit jump of five percent, thanks to the company's decision to drop its struggling personal computer unit. Stronger demand for its software led Big Blue to report earnings of $1.14 per share from continuing operations, beating the Street's expectation for earnings of $1.03 per share. Meanwhile, The Wall Street Journal reported that the company is reshuffling the leadership of its key services unit, where signings were significantly up for the quarter.

Ford Motor (NYSE:F) reported that second-quarter net income dropped to 47 cents per share, but still came in ahead of the 33 cents per share the Street had forecast for the firm. Revenue for the quarter came in at $44.5 billion, up from $42.9 billion for the same period a year ago. What's more, F held on to its forecast for earnings between $1 and $1.25 (excluding special items) for 2005.

Also slipping into the earnings confessional this morning was Johnson & Johnson (NYSE:JNJ), which posted a second-quarter gain of 89 cents per share. Excluding items, the firm pocketed a profit of 93 cents per share, besting the consensus estimate by two pennies. The company attributes the better-than-expected earnings to strong performance from its medical devices and diagnostics businesses.

Most-Active Options Update

At 1:17 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 10,639.1) has added 0.61 percent. The S&P 500 Index (SPX - 1,227.59) is higher by 0.53 percent, and the Nasdaq Composite (COMP - 2,169.4) has jumped 1.14 percent. At 1:18 p.m. Eastern time, 2,012,621 calls have changed hands compared to 1,265,107 puts, equaling a single-day put/call volume ratio of 0.62. The CBOE's equity put/call volume ratio weighed in at 0.66.

Symantec

According to Hoover's, Symantec (NASDAQ:SYMC) provides a variety of content and network security software for both consumers and businesses, which are used for virus protection, intrusion detection, and remote management. Furthermore, the company has used the success of its Norton family of consumer security software to fuel a push into products and services for enterprises, including virtual private networks and applications for firewall management.

The security is the focus of some heavy call trading this afternoon, with more than 8,300 contracts crossing the tape at its August 25 strike. However, with open interest already numbering more than 13,400 contracts, we shall have to wait until tomorrow to see if this spike in volume translates into new positions. Digging deeper into the stock's options backdrop, we find that optimism has been on the rise during the past several session. In fact, the equity's Schaeffer's put/call open interest ratio (SOIR) has dropped from a near-term peak of 0.98 on July 6 to its current perch of 0.53.

Wall Street is also rather optimistic in their outlook for the shares. Zacks reports that 16 of the 25 analysts following the firm rating it a "buy" or better.

Meanwhile, short sellers are betting that the security has run out of steam. In June, the number of SYMC shares sold short jumped by eight percent to 48.4 million, or 6.8 percent of the security's total float.

Technically speaking, SYMC has rebounded from its double-bottom at 18, and is now battling resistance at the 25 level. This region is also home to the stock's 10-month moving average, which it has yet to finish a month above this year. However, the shares have been buoyed by the support of their rising 10-week moving average since late May and could continue to rally along this intermediate-term trendline.

Looking ahead, the company is slated to enter the earnings confessional on July 28, with the Street predicting a profit of 25 cents per share. This estimate is a 32-percent improvement over its year-ago gain. Historically, the firm has been a solid performer from a fundamental perspective, as it has surpassed the consensus estimate in each of the past five quarters by an average of 7.76 percent. Another strong earnings report from this firm could shake loose the remaining bears.

Click on the following link to see a Weekly Chart of SYMC since April 2005 with 10-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=13660 .

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About Schaeffer's Investment Research (www.SchaeffersResearch.com)

Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com , is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method .